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Transcript of What is Asset Management?

If you understand the changing demands, and have the support of production, patron and logistics modelling, then Asset Management allows you to judge whether your existing asset base can cope with these demands.

Asset ManagementSo what’s all this asset management stuff all about?

Yeah?Wow, so it's more than just managing maintenance then?Tell me more!Why is that important?The story starts at the top table, with understanding what your stakeholders expect from your organisation and how your assets help you to meet those expectations.Such as?It allows you to describe what your key management considerations should be.Come with me...Levels of Service?It is fundamental to establish the expected levels of service to be delivered by your organisation. This defines what you are expecting from your assets over their lifetime.Future Demand?And if my assets are starting to fail?Such as?And that's important?You keep talking about money and spending...So what do we need to think about?By understanding the expected levels of service to be delivered, and the likely changes in demand for those services, you can assess the risks to sustaining the delivery of these services.Single points of failureequipment obsolescencechanges to the environment/external factorsUnderstanding these lets you target spending on maintaining and operating your critical assets and take cost effective mitigation actions.Levels of ServiceDemandRiskFinancial ConsiderationsWhere do I get information regarding all that?But you said asset management was about making informed decisions. What do I do with all this data?

Being able to record asset information such as maintenance history, costs, age, etc is required to be able to measure the performance of your assets, monitor their condition and make informed decisions.Establishing the data and reporting requirements, and the underlying engineering and business processes, is fundamental to getting an appropriate system to support your decisions.You use it in your planning process

Why?To bring together the above considerations and prioritize capital, maintenance and operational expenditures going forward an Asset Management Plan (AMP) is put in place.Capital, operational ANDmaintenance... it's more than just maintenance management then? Maintenance considerations are an important part of asset management, just not the ONLY one.

With increasing pressure to reduce maintenance spend, maintenance strategies and plans need to demonstrate value to the organisation.Maintenance techniques, such as Reliability Centred Maintenance (RCM), help to devise more cost effective maintenance regimes.Adding a risk based perspective further optimises the cost-effective balance between maintenance actions and risk to the business.

What can we do about this?

So, in a nutshell, what does asset management give me?Ian JacksonJoeHindleyMartin CoatesMike TapperPaul CollierIan RobertsEva WintersbergerProduced by Ben MacLaren, 2013It’s a strategic management discipline that aims to deliverthe best bang for the buck from your assets.Yeah.

It gives you confidence that asset expenditure decisions support the best life cycle cost strategies for the sustained performance of your assets....

... and balances those decisions with the level of risk and cost that your stakeholders are willing to accept.Much more! It helps you to:back up budget talks with solid factsboost delivery efficiencysave moneySimply, it helps you to make better informed decisions.Come with me...Yeah - asset intensive organisations face particular challenges with depreciation and long-term expected useful lives of those assets. Understanding the costs associated with owning assets and sustaining their operations is vital for whole of life decision making.Things like:Impact of depreciationCategorising capital and operational expendituresAllocating costs to assetsPreparing long-term expenditure forecastsAsset revaluationsFrom your business and asset information systems...The AMP acts like a business case that identifies the operational & maintenance activities, capital projects and associated cost to be expected to sustain the delivery of the expected organisationaloutcomes.

Doh! Haven't you been listening?

The capital planning process looks to optimise the capital decision making in relation to costs and time of expenditure.

What should capital planning address?

Typically, capital investment planning looks at...

Upgrade,renewal, creation or purchase of new assets Mitigate the risks to sustaining the required levels of serviceInvesting in assets to be held as an investment in their own right.

And operations?What should operational planning look at?Can I ask about maintenance now?

Operational planning is undertaken to effectively utilise the assets to meet the expectations of their stakeholders.

Measuring asset utilisationStrategies to counter over or under utilisation Balancing demand requirementsReducing wastage through smarter scheduling

A good asset management system balances financial investment against the value delivered by assets over their lifetime. This involves achieving the correct balance between expenditure (maintenance, operational and capital) and the measure of return on this investment.

It helps me understandWhat condition are my assets in?What level of service are they expected to deliver?What are the risks to sustained delivery?What do I need to spend to manage those risks? andHow do I fund that expenditure?